The Ambassador in China (Stuart) to the Secretary of State
[Received February 15—5:08 a. m.]
389. Following substance Tihwa Contel 29, dated February 11, 1949:
Despite rumors to effect many central government troops to be withdrawn to inner China, only some 150 officers have moved from Tihwa area and these have gone Anhsi in northwest Kansu reinforce Ninghsia and Chinghai Moslem troops against combined Mongolian People’s Republic and Chinese Communist attack expected possibly this spring. Suiyuan considered lost to CCP9 and southern Kansu indefensible, but intentions are defend Ninghsia, Chinghai and Kansu corridor at least as far south as Lanchow. Ma Chen-hsiang’s Tungkan (Chinese Moslem) fifth cavalry army due move this area from Tihwa when needed for common effort with other Moslem forces. Ma Hung-kwei, Ninghsia Governor, will soon be appointed vice commander northwest army under Chang Chih-chung.
However, clear signs imminent increase Communist activity and influence Sinkiang province. Ili papers have dropped Central News Agency and now using North Shensi despatches.10 Soviet consent negotiate trade pact received by new province governor Burhan11 5 days after his appointment, after 4 years’ silence on matter; but terms have not been set. Foreign Office representative Liu,12 Amprov [Provincial?] Vice Commander Tao Chih-yu, and Burhan left Tihwa for Lanchow February 5 to discuss terms this pact with Chang Chih-chung. Chang may be expected choose side with best chance winning. (End summary Tihwa telegram.)
Campare Embtel to Department 337 with above report.
This information matches up with report from controlled American source here that major purpose Chang Chih-chung’s trip northwest was consolidate bloc with Ma Hung-kwei and Ma Pu-fang13 against CCP expansion whether in peace or war. This move in turn fits into strategy approved by Acting President Li14 and Premier Sun,15 of building regional regimes to contain Communism roughly north Yangtze River and east Suiyuan, Shensi borders. Chang Chih-chung and Chinese Government willing yield to Soviets economic and other implied concessions Sinkiang partially because they know Russia could seize such rights any time and has gone good way towards doing so through Ili regime and partially because they hope secure return concessions that will limit expansiveness both Ili and CCP governments, leaving central government sphere in northwest. (End controlled American source report.)
Embassy comment: Government officials very conscious how few cards they hold vis-à-vis Chinese Communists and in consequence every bit territory and power they do hold becomes commodity which they hope trade for advantages. Strategy developing regional regimes interestingly complemented by Communist development sectional governments within their sphere.
Sent Canton 61, repeated Department 389, Moscow, Kabul, New Delhi.